Eager to avoid another scathing lecture about corporate excess from members of Congress, the CEOs of America’s two biggest automakers will travel to Washington this week in hybrid vehicles made by their companies.
Ford Motor Co. CEO Alan Mulally left for Washington Tuesday afternoon, driving in a Ford Escape small sport utility vehicle that runs on gas and electricity, while General Motors Corp. CEO Rick Wagoner will travel in a hybrid Chevrolet Malibu.
Not to be left out, Chrysler said CEO Robert Nardelli will join his Detroit counterparts in driving to Washington, D.C., this week to seek federal loans. The company says in a statement that Nardelli will drive a fuel-efficient hybrid vehicle to the congressional hearings.
All three came under fire in November when they traveled on separate corporate jets to legislative hearings on their request for $25 billion in federal loans.
The three men, along with United Auto Workers President Ron Gettelfinger, will appear before Congressional committees on Thursday and Friday to justify why the automakers should get $25 billion in federal loans to help them through a terrible economic slump. The automakers’ sales continue to plunge as consumers halt big-ticket spending amid the credit crunch, with GM posting a 41 percent drop in November sales on Tuesday and Ford reporting a 31 percent monthly decline.
The move to travel like regular folks comes after the CEOs’ last visit for hearings in November turned into a public relations disaster. Lawmakers found out that all three had flown in separate corporate jets to ask for the bailout dollars, and many harangued the CEOs for their excess.
In an effort to stem bad publicity, Ford and GM announced that Wagoner and Mulally would drive, with both CEOs taking the wheel for at least part of the roughly nine-hour, 520-mile trip. Ford also announced Tuesday that it will sell its five corporate jets, while GM said it would close its corporate jet operations on Jan. 1 and try to sell the remainder of the lease time on its seven aircraft.
Chrysler spokeswoman Lori McTavish said the company rents two corporate aircraft on an as-needed basis from an aircraft company and does not own any jets.
But the symbolism of seeking help from the taxpayers while flying corporate will take a long time to live down.
Rep. Gary Ackerman, D-N.Y., a member of the House Financial Services Committee, told the auto executives last month they were having a hard time justifying to their constituents bailing out companies whose chiefs fly around in expensive private jets.
Ackerman said there was “a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off them with tin cups in their hands. ... It’s almost like seeing a guy show up at the soup kitchen in high hat and tuxedo.”
GM spokesman Tony Cervone would not say if Wagoner would stop along the way or even when he would depart, in part for security reasons and also to avoid being followed by reporters.
“There’s a lot of security concerns. There’s also the idea of a circus that we’re trying to avoid,” Cervone said.
Wagoner will alternate between the Malibu, the Chevrolet Cobalt XFE, the company’s highest-mileage vehicle, and a Buick Lucerne sedan which runs on fuel that’s 85 percent ethanol.
Mulally also will drive part of the time in the Escape. Both men will do business along the way.
The hybrid vehicles are among the companies’ most thrifty, but not the tops in mileage. A hybrid front-wheel-drive Escape gets 31 miles per gallon on the highway, while the hybrid Malibu can get up to 34 mpg on the freeway, according to Environmental Protection Agency estimates.
Chevrolet’s manual-shift Cobalt XFE gets up to 37 miles per gallon, while a manual transmission Ford Focus gets 35 mpg on the freeway.
GM said in a statement Tuesday that it will cease operating its aircraft services at Detroit Metro Airport, with 49 people likely to lose their jobs. GM has a fleet of seven leased aircraft, and is trying to sell the remaining time on the leases to other air service operators, said spokesman Tom Wilkinson. It also is negotiating with an aircraft operator to use the Detroit facility, he said.
Wilkinson would not say if GM would have made the move without the criticism from Congress, but said the company has been cutting travel as it has restructured to try to return to profitability.
“We already cut back travel so much it was getting hard to justify a dedicated corporate aviation group,” Wilkinson said.
Ford’s restructuring plan, submitted to Congress Tuesday, includes canceling all 2009 bonuses for global management and North American workers.
Ford said it hopes to restructure the company without accessing government loans, but promised CEO Mulally would work for $1 per year if the automaker did access funds. The company said it will sell its corporate aircraft, and is requesting access to up to $9 billion worth of bridge financing as part of its transformation plan.